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Reanda Malaysia in the news -'GST inclusive' prices bad for margins
Thursday, 05 July 2018 05:51

Businesses which have been selling goods inclusive of the consumption tax or absorbing the levy into their prices, will see their margins thinned further when the Goods and Services Tax (GST) rate drops to zero.

The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) VP of economics research Koong Lin Loong (picture) said some retailers have been selling their products at “GST inclusive” prices and will not be forced to take lower profits once the GST rate becomes zero on June 1.

“There are also retailers who put their prices to be inclusive of the GST and the prices did not increase. But now that the GST has been reduced from 6% to zero-rated, they need to reduce their prices and their margin will be lower,” he told The Malaysian Reserve (TMR).

He said retailers are expected to comply with the GST Act despite the change in effective rates.

Koong lauded the government’s measure to slash the GST rate first before abolishing the tax. He also said the two- week transition to zero-rated GST is critical to businesses.

“We don’t want businesses to be interrupted. Can you imagine if the government announces that they will implement the zero-rated GST on Jan 1, 2019? Consumers will wait and not spend.”

However, some manufacturers are in the dark over the government’s plan to reintroduce the Sales and Services Tax (SST).

Malaysian Iron and Steel Industry Federation president Datuk Soh Thian Lai said the materials cost will temporarily decrease following the implementation of zero-rated GST.

“With zero-rated GST and no SST at the moment, the cost will reduce. Importers also do not have to pay GST and this will ease their cashflow.

“From June 1 until the unknown period, local manufacturers don’t have to pay the 6% GST anymore. But once the SST is implemented, we don’t know how the price will be because we don’t know the rate of the SST,” Soh told TMR.

He said the SST rate is normally between 5% and 10% and manufacturers will need time to readjust to the tax system which was abolished three years ago.

Source: Business Daily

 
Reanda Malaysia in the news - First tax holiday for Malaysian consumers in 40 years begins tomorrow
Thursday, 28 June 2018 09:24

For the first time in four decades, Malaysians will be taking a breather from taxes levied upon products and services for a period of three months starting tomorrow, as zero-rated Goods and Services Tax (GST) comes into effect and the Sales and Services Tax (SST) is only to be implemented from Sept 1.

"For the first time after 40 over years, Malaysia's public consumer is not paying any taxes on goods and services in respect of no sales tax, no services tax and no GST. All these taxes will not be charged, so we call this three months, a tax holiday," K-Konsult Taxation Sdn Bhd managing partner Koong Lin Loong told SunBiz.

On what this tax holiday could mean for consumers, Koong explained that while they may be expecting at least a 6% decrease in prices across the board because of the zero-rating of GST, it may not be the case for items sold in supermarkets for example, which currently do not state the breakdown for GST. He said for these items, prices may not go down as much, at most by 5.66%.

Koong did however opine that the "feel good" factor brought about by the zero-rating of GST could lead to increased demand for goods and services by consumers.

Thenesh Kannaa, Partner at Thenesh, Renga & Associates (Tratax) noted though that for businesses, the three months will be more of a breather before it goes back to the SST regime, where manufacturers and importers will be the tax bearers.

He said businesses should bear in mind that GST has been zero-rated but not abolished, thus they still have to ensure that records are maintained and are in adherence with the GST Act 2014, which is yet to be repealed in a parliamentary sitting. This includes the submission of GST returns as per routine until further notice, and the prescription of tax invoices with the correct GST rate and date of purchase.

While the three-month window may not have an immediate impact on production cost since GST is borne by end users, going by the previous SST yardstick, there is likely to be an increase in production cost once SST is enforced.

As the government is still firming up details on the new SST and a rate is yet to be announced, Koong opines that both sales and services tax would be standardised at 6% to avoid a spike in inflation.

The previous SST stipulated a sales tax of 10% on local manufacturers and importers, while the services tax stood at 6%.

Source: The Sun Daily Malaysia

 
Reanda Malaysia in the news - Tax consultants: Zero-rated GST could spur market sentiment
Friday, 15 June 2018 03:30

PETALING JAYA (May 17): Taxation consultants lauded the government’s move of zero-rated GST as it will improve the ease of doing business in Malaysia and lessen the hassle for developers, especially those who have mixed-use developments.

The Associated Chinese Chambers of Commerce & Industry of Malaysia (ACCCIM) head of taxation committee Koong Ling Long said the computation and book-keeping for different categories of GST is complicated and require a lot of technical support, which will eventually increase the cost of business.

“For a developer who has mixed developments, this could be even harder as commercial and residential properties are in different categories,” he told EdgeProp.my.

Koong is also a member of GST Monitoring Committee of the Ministry of Finance and GST Technical Committee of the Royal Malaysian Customs.

For commercial properties which are under the standard rated 6% GST category, developers are allowed to claim the input tax (for the raw material purchased for the construction) from the government as the final GST will be paid by commercial property buyers.

Source: The Edge Property

 

 

 
Reduction of GST to 0% in Malaysia
Wednesday, 06 June 2018 02:28

Malaysia's opposition coalition PAKATAN HARAPAN, or ALLIANCE OF HOPE, led by former Prime Minister Tun Mahathir Mohamed, prevailed in general election held on 9th may 2018, paving the way for the country's first change of power since its independence in 1957.

The new government’s manifesto themed “REBUILDING OUR NATION FULFILLING OUR HOPES” is comprehensive, inclusive and full of new ideas to meet the aspirations of all Malaysians.

The manifesto contains 10 promises in 100 days; 60 promises in five years and 5 special pledges. It covers a wide ranging of strategic proposals and measures cutting across sectors, communities, and east Malaysia, which are aimed to rebuild the nation and fulfil the aspirations of Malaysians.

The focus now is on the 10 promises that will be implemented in the first 100 days of the government’s administration. Top the list is the abolishment of GST, starting with zero rating on 1 June 2018 and be replaced with a new sales and services tax (SST) on 1 September this year.

There are concerns about the transition period following the migration from GST to SST. Businesses foresee that the reinstatement of the previous SST system can be a big issue and should be averted because of the flaws, and cascading and compounding effect of the SST system.

A change of national government and the tax systems clearly have far more serious impact and implications as it affects all Malaysians. Mr. Koong indeed was “hot” to be interviewed by various major Malaysian Medias and invited as live commentator at radios to give his professional views and advises on the transition from GST to SST. He also contributed further in-depth comments on this old and new tax system in his columns, of which have been featured by Malaysian prominent Chinese news daily.

Collection of relevant media coverage:

 

 
Malaysia-China Belt and Road SME Video Conference
Friday, 20 January 2017 08:51

Jointly organized by China Overseas Exchange Associateions, China Embassy in Malaysia, MCA Belt and Road Centre and Secretariat for the Advancement of Malaysian Entrepreneurs (SAME), the first-of-its-kind teleconferencing dialogues, held on 17 January 2017, gathered more than 200 officials and industry players in both bountries for an exchange of views, without them having to leave their respective locations.

This dialogue has deepen the commercial and people-to-people links in trade, education and tourism including via teleconferencing facilities.  Through this session Malaysian-China share information and put forward ideas on new opportunities to improve mutual trade cooperation for the New Year.

Datuk Seri Dr Wee Ka Siong, Minister in the Prime Minister Department of Malaysia, Dr Huang Huikang, China's ambassador to Malaysia and Mdm Wang Xiaoping, Vice President of China Overseas Exchange Associations, attended the session and delivered their opening speeches.

Managing Partner Mr. LL Koong, represented Reanda Malaysia of which the only accounting firm in Malaysia was invited as one of the three local speakers to this dialogue.

 
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